R.K. GARG ETC. ETC. versus UNION OF INDIA & ORS. ETC.

R.K. GARG ETC. ETC. versus UNION OF INDIA & ORS. ETC.

The Act is not violative of Article 14 as it constitutes a reasonable classification given its object to mop up black money; the President possesses power under Article 123 to promulgate ordinances amending tax laws in emergent situations. The Act’s provisions are upheld as constitutionally valid and not arbitrary, artificial, or evasive; its operation is rightly confined to persons in possession of black money. The Act is directed at canalising black money for productive purposes in the national economy, and the legislative measures adopted are within competence and constitutional tolerance towards economic experimentation and differentiated treatment.

Parties
Petitioner: R.K. Garg; Respondents: Union of India & Ors.
Jurisdiction
India
Judgment Date
20 October 1981
Procedural Posture
Writ Petition / Final Judgment
Outcome
Petitions dismissed; Act and Ordinance upheld
Legal Topics
Validity of Special Bearer Bonds Act, Ordinance Making Under Article 123, Article 14 Equality, Classification in Tax Legislation
Constitutional Law Tax Law Economic Legislation Validity of Special Bearer Bonds Act Ordinance Making Under Article 123 Article 14 Equality Classification in Tax Legislation

Case Brief

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Parties

R.K. Garg

Petitioner

Union of India & Ors.

Respondents

Procedural Posture

Writ Petition / Final Judgment

Legal Issues

  1. 1 Whether the Special Bearer Bonds (Immunities and Exemptions) Ordinance, 1981 and Act, 1981 are violative of Article 14 of the Constitution
  2. 2 Whether the President's power under Article 123 extends to promulgating ordinances affecting tax laws
  3. 3 Whether the Act puts a premium on dishonesty and offends morality

Ratio Decidendi

The Act is not violative of Article 14 as it constitutes a reasonable classification given its object to mop up black money; the President possesses power under Article 123 to promulgate ordinances amending tax laws in emergent situations. The Act’s provisions are upheld as constitutionally valid and not arbitrary, artificial, or evasive; its operation is rightly confined to persons in possession of black money. The Act is directed at canalising black money for productive purposes in the national economy, and the legislative measures adopted are within competence and constitutional tolerance towards economic experimentation and differentiated treatment.

Court Disposition

Petitions dismissed; Act and Ordinance upheld

Orders

  • The writ petitions challenging the constitutional validity of the Special Bearer Bonds (Immunities and Exemptions) Ordinance, 1981 and Act, 1981 are dismissed.
  • The majority upholds the Act and Ordinance as valid under Article 14 and within the President’s power under Article 123.